Impact report: looking back to move forward

As we near the end of 2020, many of us will be looking back at this extraordinary year and the challenges and changes we faced. At Big Society Capital, we have taken some time to reflect; to take stock on where we are now and what we have learnt so far.


Written by

Stephen Muers, Chief Executive Officer

Our new impact report highlights the work that we and our partners have done, what we have achieved and what we have learnt. It includes a specific look at the response that we collectively put in place when the pandemic hit and highlights some of the fantastic work of both front-line enterprises and fund managers to address the impact of the crisis. However, it is too early to say what the longer-term impact of COVID-19 will be on our sector.

Our approach to impact

Our mission at Big Society Capital is to improve people’s lives in the UK through investment. It is the front-line organisations that deliver such impact, and the fund managers we back who invest in and support them. We highlight over 30 stories in the report that show how social impact investment has helped charities, social enterprises and other social purpose organisations to grow and thrive. This is not to claim credit for the work they do but to illustrate what can happen if we get the system right, as impact for us is ultimately about systems change.

Our role is to try to change systems to allow more capital to flow to those social purpose organisations. Therefore, this report talks a lot about our role and contribution working in partnerships to build systems: of investors, fund managers, policy frameworks, data and so on. Measuring this kind of ecosystem building is difficult. This report focuses on describing our approach and role, and sharing reflections and learning, including on what has not worked or where there is more to do.

Attracting co-investment

Big Society Capital was set up with the promise of £625 million from dormant bank accounts and our four bank shareholders. While that is a lot of money, it is a tiny drop in the ocean of what would be needed to make serious change on even one of the social issues that we care about. Therefore, we have always been focused on using our money in a way that supports the development of a system that brings in far more capital beyond what we have. So far co-investment alongside us totals £1.3 billion, and the report shows some examples of how we’ve worked with others to achieve this.

Growing new investment markets

We were also set up with the explicit mission of growing new markets. We are delighted to show in the report the progress made in doing that over the eight years of our existence. Social property funds, which scarcely existed as a specific asset when we were set up in 2012, now have some £2 billion under management. Venture funds with a social mission have grown from 3 to 28 over the same period, of which we have invested in 11. And the charity bond market, supporting organisations such as the Thera Trust and Golden Lane Housing, has grown from £5.4 million in 2012 to £337 million last year.

Reaching those who need it most

Attracting large co-investments and building new markets to scale is fantastic, but only worthwhile if we ensure that the benefits reach all parts of the UK and people from all communities and all backgrounds. We are starting to see success in this respect too. For example, in our small loans portfolio, 50% are in the 30% most deprived neighbourhoods in England. And the Fair by Design Fund estimate that it has reduced the “poverty premium” (the additional costs faced by people on low income) by over £11 million so far. However this is also an area where we recognise we need to do more, working together with others in the sector, not least as the data we have on the extent to which our investment reaches all communities (for example BAME-led organisations) is still not good enough.

This impact report takes stock of where we are now and what we have learnt, but we know there is much more to do. Our current strategy was designed to run up to 2020, and we are now reflecting on what comes next, in the light of learnings so far and also the impact of the pandemic. We don’t expect to radically change our model, and our overall goal of building an investment ecosystem that supports front-line enterprises to improve lives remains. We will aim to be both more precise and more ambitious about the change we think is possible, how we will work with others to get there and how we will know whether we are making progress. And we will be clearer on what Big Society Capital’s role needs to be in different areas of work: where we need to take the lead and where we will make greater and more sustainable progress by supporting others.

I’d like to thank all those who have contributed to the report whether through the impact they make or through their help in compiling it. If you want to come with us on that journey, to make our next report on the collective impact we are all having even more impressive, please get in touch.

Read the impact report

stephen 2022

Stephen Muers

Chief Executive Officer